Home Equity Income Trust Announces July Distribution and Suspension of Distribution Reinvestment Plan

TORONTO, July 16 /CNW/ - Home Equity Income Trust (TSX: HEQ-UN.TO) ("HOMEQ" or the "Trust") today announced a cash distribution of $0.09 per unit for the month of July 2008 (equivalent to $1.08 per unit on an annualized basis). The distribution is payable to unitholders of record on July 31 and will be paid on August 15, 2008.

Unitholders who are non-residents of Canada will be required to pay all withholding taxes payable in respect of any distributions by the Trust.

Effective immediately, the Trust will suspend its optional distribution reinvestment plan permitting unitholders to use the monthly cash distribution paid on their existing units to purchase additional units. The plan also paid 4 percent in additional units. At June 30 approximately 13% of issued and outstanding units were enrolled in the plan. "At current market prices the equity issued under the plan is expensive. We are within the leverage limits prescribed by DBRS for the AAA rating on the medium term notes of CHIP Mortgage Trust and no longer receiving the equity raised by the plan will not materially impact our ability to maintain these ratios," said Steven Ranson, President and CEO of the Trust.

The Trust may consider reinstating the dividend reinvestment plan in the future.

Forward Looking Statements

Home Equity Income Trust from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including, in particular, the forecast of cash distributions and the likelihood of HOMEQ's success in developing and expanding its business. These may be included in the Annual Reports, regulatory filings, reports to unitholders, press releases, Trust presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of HOMEQ. Actual results may differ materially from those expressed or implied by such forward-looking statements. HOMEQ does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time.

About Home Equity Income Trust

Home Equity Income Trust provides unitholders with stable monthly cash distributions from a portfolio of reverse mortgages originated by its wholly owned subsidiary Canadian Home Income Plan Corporation ("CHIP"). The Trust's units are rated SR-2 by Standard and Poor's, which assigns this rating to funds that have "a very high level of cash distribution stability relative to other rated Canadian income funds." As of March 31, 2008, the portfolio generating cash returns to the Trust comprised approximately 6,800 reverse mortgages with an accrued value of $738 million, secured by residential properties across Canada worth approximately of $2.1 billion. CHIP (www.chip.ca), has been the main underwriter of reverse mortgages in Canada since pioneering the concept in 1986.

The Trust's units trade on the Toronto Stock Exchange under the symbol HEQ.UN. Additional information on HOMEQ, including annual and quarterly reports and the Trust's distribution reinvestment plan, can be viewed at www.homeq.ca.

Contacts

Steven Ranson
President and Chief Executive Officer
(416) 413-4663
sranson@homeq.ca

or Scott Cameron
Vice President
Finance
(416) 413-6605
scameron@homeq.ca